Being Good or Being Known: An Empirical Examination of the Dimensions, Antecedents, and Consequences of Organizational Reputation

Abstract

We examined the extent to which organizations’ reputations encompass different types of stakeholders’ perceptions, which may have differential effects on economic outcomes. Specifically, we propose that reputation consists of two dimensions: (1) stakeholders’ perceptions of an organization as able to produce quality goods and (2) organizations’ prominence in the minds of stakeholders. We empirically examined the distinct antecedents and consequences of these two dimensions of reputation in the context of U.S. business schools. Results suggest that prominence, which derives from the choices of influential third parties vis-à-vis an organization, contributes significantly to the price premium associated with having a favorable reputation.